The federal government has shared with the International Monetary Fund (IMF) a plan to substantially increase gas prices next fiscal year for various sectors including domestic users, fertilizer plants, CNG stations, and cement factories, prominent sources told ProPakistani.
The economic team has shared a comprehensive circular debt management plan with the IMF. Sources said the initial proposal suggests raising the gas rate by Rs. 100-400 for both protected and non-protected consumers, besides proposals for tariff adjustments to manage the circular debt in the gas sector.
The government has informed the IMF that plans not to increase gas rates for commercial tandoors. The IMF’s economic team has been in talks with the government about tariffs, revolving credit, and reforms for the gas sector.
A dividend scheme was discussed as part of the debt reduction strategy, sources added.
Both sides have agreed to promptly share data on recovery, reforms, and tariffs with the IMF to ensure the smooth implementation of the proposed changes.
The federal government last week informed the lending agency that it expects circular debt to increase by Rs. 150 billion to reach Rs. 2.5 trillion by the end of the current fiscal year. This massive jump in power sector debt violates the pre-determined targets set by the lender last year to keep it controlled at Rs. 2.31 trillion.
IMF had requested a detailed plan from the Power Division to prevent further increases in the debt. This plan, which was also supposed to include proposals for tariff adjustments to manage the gas sector circular debt, has been shared with the lender today.
